A document seen by Reuters, as well as interviews with buyers and dealers, have revealed that Chinese electric vehicle manufacturers Neta and Zeekr have inflated their sales numbers by insuring vehicles before being sold to customers.
The arrangement enabled the companies to register a sale of a vehicle based on Chinese industry practices, helping them meet lofty sales goals.
More than half of the 117,000 vehicles Neta reported sold from January 2023 to March 2024 were booked by this means, represented at repo prices as early sales opportunities of at least 64,719 vehicles.
These vehicles were insured before being shipped or delivered to buyers, the documents, sent to dealers and seen by Reuters, show.
Zeekr, a luxury EV brand owned by Geely, used a similar approach in late 2024. The business reported early sales in Xiamen through its major local dealer, state-owned Xiamen C&D Automobile.
Receipts and dealer interviews show that vehicles were registered in business names before being sold to individual buyers later.
Zero-mileage cars and industry pressure
While the approach, selling “zero-mileage used cars”, is not new to the Chinese automotive market, it has come under increased scrutiny lately due to the months-long price war plaguing the country’s oversupplied EV market.
In this system, vehicles are shown as sold in industry data, but never make it to a real end-user.
Now, China’s Ministry of Industry and Information Technology is allegedly getting ready to crack down on the practice.
The China Association of Auto Manufacturers announced plans to limit the resale of cars in the country within six months of registration to combat the early booking of vehicles.
This comes on the back of higher scrutiny from central government agencies over automakers, meeting with the heads of major firms to point out fears of excessive competition and data manipulation.
State media names and shames
Over the last few weeks, state media sources have directly mentioned Zeekr in reports regarding exaggerated sales, a rare public condemnation.
The China Securities Journal reported that Zeekr automobiles in Guangzhou and Chongqing came with pre-purchased insurance, leaving customers uninformed that their policies had already begun.
In Xiamen, Zeekr’s reported sales increased to 2,737 vehicles in December, more than 14 times the monthly norm.
While Reuters could not confirm how many of these were booked early, dealer and buyer evidence suggests that a large portion may not have reached actual customers until much later.
The journal also cited concerns about Neta’s sales data, finding inconsistencies but without providing precise figures. Reuters is the first to report on how Neta exploited pre-sale insurance to increase its sales.
Dealers under pressure
Dealers are feeling the squeeze from a strong push to register cars as sold, and an aggressive move to get cars registered in the dealership’s name as sold.
A recent letter from four dealer associations in the Yangtze River Delta region urged automakers to use more realistic sales targets and incentive structures, citing systemic problems pressuring them to cook the numbers.
A dealer for Neta, who requested anonymity due to a lack of authorisation to speak to the media, told Reuters it was “normal” to list vehicles as sold once insurance arrangements were made but before delivery.
These policies contained the names of the agents and other vehicle details, which meant the dealer could sell them to real customers later.
However, in a lot of these instances, customers were unaware that their insurance had started long before they had purchased it.
Neta has been doing this since late 2022, when the dealer explained the company set up the process in order to get a tax rebate on first-generation EVs that was set to expire that year.
A few purchasers were informed that their traffic protection was remembered for the agreement, while others unexpectedly found that it had expired weeks earlier.
Financial struggles and oversupply
Neta, owned by Zhejiang Hozon New Energy Automobile, has been experiencing financial troubles. The firm, previously China’s eighth-largest EV manufacturer, saw yearly sales fall from 152,000 in 2022 to 87,948 in 2024.
Only 1,215 units were sold during the first quarter of 2025. The corporation filed for bankruptcy last month, according to state media.
Despite efforts to sell these early-booked vehicles, one Neta dealer reported that many of the zero-mileage cars remain unsold in storage.
“The company only had one message: Just do it, everyone else is doing it,” stated the dealer.
Zeekr and Xiamen C&D tied to bulk registrations
The Zeekr bookings focused on its work with Xiamen C&D, which has been insuring and registering the vehicles as two subsidiary companies in December.
Four dealers and two buyers said this enabled Zeekr to list the cars as sold before the end of the year. The rest of the vehicles were subsequently sold off to different cities such as Beijing and Chongqing.
A Zeekr salesman then offered him a rebate and a 10,000 yuan charging voucher, but the vehicle had already been covered under an alternative name, one buyer informed Reuters.
Most of the 2,737 Zeekr vehicles sold there in that month were companies buying them, not individuals, according to data from the China Automobile Dealers Association.
But when the plates were registered over the same period, only 271 cars had received local license plates that month, indicating that many of the vehicles recording sales had yet to be delivered to end users.
Regulatory reckoning ahead
As China’s EV business navigates a post-boom era typified by overcapacity and shrinking margins, the revelation of inflated sales methods such as zero-mileage registrations points to a deeper lack of trust in official data and corporate governance.
As regulators, state media, and trade associations increase their scrutiny, automakers may face a reckoning that reshapes the industry’s competitive landscape.
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